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Samsung’s latest flame-out, a nail in consumer confidence on the electronics giant ?

by October 11, 2016 General

The Galaxy Note 7, foreground, is displayed in New York. | (AP)

With the most recent instance of a Samsung note 7 replacement catching fire aboard an US flight, weeks after a note 2 device caught fire on Singapore –Chennai bound Indigo flight, it is leading to thequestion on everyones mind – will Samsung bounce back from this fiery controversy?

The Samsung Galaxy Note 7, launched in August, has been in controversy with instances of certain units overheating and catching fire prompting Samsung to recall almost close to 2.5 million note 7 devices shipped globally as well as Both United State Federal Aviation Agency(FAA) as well as Director General of Civil Aviaition(DGCA) issuing warnings not to carry Note 7 devices on planes as well as to other countries.

Samsung at present holds 22% of the worldwide smartphone sales in the Q2 2016 with an 0.5 increase since the second quarter of 2015 where as Apple had seen a 1.7 % decrease in smartphone sales since the second quarter of 2015, according to Gartner.

But with the launch of note 7 led to a sudden fizzle with news of devices overheating while charging and catching fire while leading to mass recalls of the device around the time, the Iphone 7 was launched.The recall may cost Samsung up to $5 billion in revenue this year and will damage the company’s reputation.Samsung says it has sold 2.5 million phones with faulty batteries, analysts told Reuters.

There was a sharp decline in Samsung stock value close to September 12 where news of the global recall affected andshortly after which that it had seen a gradual recovery by the end of september.

The news on many online forums have many threads related to the note 7 recall being the most discussed ones along with discussions and sub threads regarding the recall and how to get their note 7 device exchanged for any other devices.

In the coming weeks, consumer confidence towards Samsung electronics which has a size-able share in the electronics and smart phone industry and a foray into all aspects of electronics from personal computers, to smartphones will do to regain consumer confidence regarding its products.

Recall Rewind:

Dell recall of Sony made laptop batteries: In 2006, Dell had to recall laptop batteriesmanufactured by Sony in Dell notebook as it was said that the batteries caught fire while charging and in use.

Faulty Takata corp airbags: It lead to close to 300 million airbags manufactured bythe company being recalled when it was known that close to 9 people had been killed by shrapnel from faulty components.

Merck -Vioxx: In 2004, Merck the pharmaceutical company was forced to take the painkiller vioxx off shelves as it studies showed it doubled heart attack and stoke risks and was said to caused heartattack and stroke in close to 50,000+ Americans.

Toyota car recall: Between 2009 to 2011, Toyota was forced to recall many of itscars due to issues regarding the foot pedal, accelerator pedal and Anti locking brakes system software in three recalls asthese were said to have caused deaths due to acceleration by faulty pedals and many other issues.

(With Inputs from Agencies)